The phenomenal growth of the Indian economy is well documented, however, wellness and spa companies wanting to do business there need to be surgical in their analysis of the opportunities if they are to create successful businesses.
Although the wellness and spa sector is forecast to grow from inr700bn in 2012 to over inr1 trillion in 2015, this number hides a plethora of variables, many of which have been thoroughly laid out by a new PricewaterhouseCoopers report on the Indian wellness economy Imperatives for growth: the wellness industry – an invaluable document for those considering investing.
The report shows strategic deals with partners are driving much of the growth: up to 65 per cent of all deals since 2009 have been of this nature. International operators targeting India, initially aiming for the 15 bigger cities, are now going into second and third tier locations to maintain growth. In hair and beauty they include Dessange, Saks and Toni & Guy, in fitness, Fitness First and Anytime Fitness and in spa, Six Senses.
PwC says the market has been characterised by small businesses, but the arrival of corporate players will drive investment as they look for funds to fuel expansion.
The greatest consumer demand is in three areas: hygiene, curative and enhancement. As a result, sales of products represent up to 60 per cent of the market, with services at only 40 per cent. As well as being a greater proportion of volume, products also have higher value – PwC says EBITDA for beauty and wellness products ranges from 20-30 per cent, while services operate at 8-20 per cent.
This indicates that spa operators who enter this market off the back of powerful retail brands will have both a strategic advantage and higher revenues.
There are other clues about demand: wellness-related F&B sales, skin and haircare and alternative therapies represent more than half the value of the market, meaning operators need a business model which plays to this. Fitness is growing fast, with 50 per cent of openings this year in that sector of wellness, so spas which make exercise a core offering could tap into this demand.
Standards and training appear to be the biggest hurdles to overcome in terms of industry development, but the greatest challenge overall will be creating a margin in the face of low consumer spend, discounting and global inflation. But those that navigate their way through these challenges could build businesses with exciting potential.
Liz Terry, editor twitter: @elizterry
Read more from this issue of Attractions Management magazine
View contents of Attractions Management 2013 issue 3
Interview: Lee David Stephens
Thai-based management company
MSpa runs 44 spas with 450 staff. The
General Manager talks to Katie Barnes
about a recent deal with Per Aquum
and its rapid expansion
Interview: Kathryn Moore
MSpa’s operations director is creating
a brand new wellness concept and a
fast track spa manager programme
Company Profile Promotion: GOCO Hospitality
After just four years of operation GOCO Hospitality is regarded as a global leader
in wellness hospitality segment of the industry. With 22 projects on its books,
spanning three continents, we look at what underpins the company’s success
Company profile promotion: Comfort Zone
The Comfort Zone spa brand has been newly revamped and revitalised to better communicate its core offerings as a natural, scientific and soul-centred skincare and lifestyle brand
Green: Being green
Ecocert’s new Being label is the first
public-facing green certification for
spa operations, eco-friendly
Promotional Feature: Part 4 - Pre-Opening
Opening a spa successfully is all about planning. Gary
Henkin, president of WTS and Doug Chambers, principal
of Blu Spas, share their experience of pre-opening
Company Profile Promotion: Aromatherapy Associates
Global product company Aromatherapy Associates knows how
to make treatments and retail work in a spa environment and
partners with operators to make a real point of difference
Industry survey: Price to pay
A GSWS report on global therapist pay focuses on differing salary composition, benefit and commission structures. Lisa Starr takes a closer look
Spa Retreat: Running on juice
Juice Master founder Jason Vale tells
Kate Cracknell about its retreats and
how juicing can help prevent disease
Interview: Wee Wei Ling
Neena Dhillon meets the founder of
St Gregory: the spa brand owned by Pan
Pacific that’s just opened a wellness
floor in Singapore’s ‘hotel in a garden’
Research: Moving target
A McKinsey study highlights the fast-changing
spending patterns of China’s
luxury consumers. Leonor Stanton
finds out what this means for spas
Advertisement Promotion: A gift from Ez-Runner...
Vouchers can be used as a stand-alone system integrated into your website or added as a module of Ez-Runner’s leisure management software to control your spa facility
The phenomenal growth of the Indian economy is well documented, however, wellness and spa companies wanting to do business there need to be surgical in their analysis of the opportunities if they are to create successful businesses.
Although the wellness and spa sector is forecast to grow from inr700bn in 2012 to over inr1 trillion in 2015, this number hides a plethora of variables, many of which have been thoroughly laid out by a new PricewaterhouseCoopers report on the Indian wellness economy Imperatives for growth: the wellness industry – an invaluable document for those considering investing.
The report shows strategic deals with partners are driving much of the growth: up to 65 per cent of all deals since 2009 have been of this nature. International operators targeting India, initially aiming for the 15 bigger cities, are now going into second and third tier locations to maintain growth. In hair and beauty they include Dessange, Saks and Toni & Guy, in fitness, Fitness First and Anytime Fitness and in spa, Six Senses.
PwC says the market has been characterised by small businesses, but the arrival of corporate players will drive investment as they look for funds to fuel expansion.
The greatest consumer demand is in three areas: hygiene, curative and enhancement. As a result, sales of products represent up to 60 per cent of the market, with services at only 40 per cent. As well as being a greater proportion of volume, products also have higher value – PwC says EBITDA for beauty and wellness products ranges from 20-30 per cent, while services operate at 8-20 per cent.
This indicates that spa operators who enter this market off the back of powerful retail brands will have both a strategic advantage and higher revenues.
There are other clues about demand: wellness-related F&B sales, skin and haircare and alternative therapies represent more than half the value of the market, meaning operators need a business model which plays to this. Fitness is growing fast, with 50 per cent of openings this year in that sector of wellness, so spas which make exercise a core offering could tap into this demand.
Standards and training appear to be the biggest hurdles to overcome in terms of industry development, but the greatest challenge overall will be creating a margin in the face of low consumer spend, discounting and global inflation. But those that navigate their way through these challenges could build businesses with exciting potential.
Liz Terry, editor twitter: @elizterry
Read more from this issue of Attractions Management magazine
View contents of Attractions Management 2013 issue 3
Interview: Lee David Stephens
Thai-based management company
MSpa runs 44 spas with 450 staff. The
General Manager talks to Katie Barnes
about a recent deal with Per Aquum
and its rapid expansion
Interview: Kathryn Moore
MSpa’s operations director is creating
a brand new wellness concept and a
fast track spa manager programme
Company Profile Promotion: GOCO Hospitality
After just four years of operation GOCO Hospitality is regarded as a global leader
in wellness hospitality segment of the industry. With 22 projects on its books,
spanning three continents, we look at what underpins the company’s success
Company profile promotion: Comfort Zone
The Comfort Zone spa brand has been newly revamped and revitalised to better communicate its core offerings as a natural, scientific and soul-centred skincare and lifestyle brand
Green: Being green
Ecocert’s new Being label is the first
public-facing green certification for
spa operations, eco-friendly
Promotional Feature: Part 4 - Pre-Opening
Opening a spa successfully is all about planning. Gary
Henkin, president of WTS and Doug Chambers, principal
of Blu Spas, share their experience of pre-opening
Company Profile Promotion: Aromatherapy Associates
Global product company Aromatherapy Associates knows how
to make treatments and retail work in a spa environment and
partners with operators to make a real point of difference
Industry survey: Price to pay
A GSWS report on global therapist pay focuses on differing salary composition, benefit and commission structures. Lisa Starr takes a closer look
Spa Retreat: Running on juice
Juice Master founder Jason Vale tells
Kate Cracknell about its retreats and
how juicing can help prevent disease
Interview: Wee Wei Ling
Neena Dhillon meets the founder of
St Gregory: the spa brand owned by Pan
Pacific that’s just opened a wellness
floor in Singapore’s ‘hotel in a garden’
Research: Moving target
A McKinsey study highlights the fast-changing
spending patterns of China’s
luxury consumers. Leonor Stanton
finds out what this means for spas
Advertisement Promotion: A gift from Ez-Runner...
Vouchers can be used as a stand-alone system integrated into your website or added as a module of Ez-Runner’s leisure management software to control your spa facility
OMA has completed a major transformation of New York's New Museum, creating a larger
cultural campus that combines expanded exhibition spaces with learning, performance,
hospitality and public programming.
A US$50 million (£44.2 million, €51.2 million) transformation of Chicago's historic McCormick
Mansion has created a new destination that combines live magic, immersive theatre, dining and
private membership under one roof.
The Montana Historical Society has officially celebrated the opening of its new Montana
Heritage
Center, a US$107 million (£79 million, €92 million) destination that combines immersive
storytelling with cutting-edge audiovisual technology to bring the sta
San Antonio Zoo has reported a US$283 million economic impact for 2025, following a decade-
long transformation programme that has seen almost US$200 million invested into the Texas
attraction.
Plans for the AU$180 million redevelopment of Reef HQ Aquarium in Townsville, Australia, are
progressing, with the project set to transform the attraction into a global centre for reef
education and conservation.
Abu Dhabi-based investment firm Mubadala Capital has made a binding, fully financed
€1 billion
offer to acquire Pierre and Vacances SA, the European holiday resort operator behind the
continental European Center Parcs business.
Disney has reaffirmed its commitment to investing US$30 billion in its US parks and cruise
business by 2033, using new America250 celebrations to underline the role its attractions play
in supporting jobs, tourism and economic growth.
Expo 2030 Riyadh is being planned as a permanent visitor destination, with organisers
confirming the six-million-square-metre site will become a Global Village after the event closes.
The owner of one of Australia's best-known waterparks has acquired a major competitor,
creating a new attractions business spanning two of the country's largest visitor destinations.
The Toverland theme park in the Netherlands has announced a €98m expansion programme
that will add a resort, new attractions and staff facilities as it pursues plans to become a multi-
day destination.
+ More news
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